Corporate Investment and Stock Market Listing: A Puzzle?
John Asker (New York University, United States)

We document sizeable and suprising differences in investment behavior between stock market listed and privately held firms in the U.S. using a rich new data source on private firms. Listed firms invest substantially less and are less responsive to changes in investment opportunities  compared to matched private firms, even during the recent financial crisis. These differences do not reflect observable economic differences between public and private firms (such as lifecycle differences) and instead appear to be driven by a prspensity for public firms to suffer greater agency costs. Evidence showing that investment behavior diverges most strongly in industries in which stock prices are particularly to current earnings suggests public firms may suffer from managerial myopia. Joint with Joan Farre-Mensa and Alexander Ljungqvist.

Grading on a Curve – Tournament Incentives in the Classroom
Sander Onderstal (University of Amsterdam)

In this seminar, we present the results of a field experiment which we conducted to compare the response of students to the two most commonly used grading practices: absolute grading (i.e., criterion-referenced grading) and grading on a curve (i.e., relative grading or norm-referenced grading). The experiment involves over 500 subjects following the same Bachelor course. We have randomized students into two treatments: for the “Blue” students, the grade of their midterm exam is determined using an absolute scheme and the grade of the end-term exam using a relative scheme, and for the “Yellow” students the other way around. We test for treatment effects with respect to gender, ability, and nationality. Risk, ambiguity, and competitive preferences as well as confidence were measured in an incentivized survey and are used as controls in the analysis. (Joint with Eszter Czibor, Randolph Sloof, and Mirjam van Praag.)